Germany’s “Music Revolution”

Germany’s “Music Revolution”

Germany’s Federal Music Industry Association (BVMI) announced that its total revenue for the music industry, including CDs, Vinyl, DVDs, downloads, and streaming services totaled €1.588 billion or $1.94 billion in 2017. This was a 0.3 percent decrease from 2016. This lack of significant increase or decrease has people wondering if Germany’s music industry has become stagnate.

Many interested parties disagree and are putting their hopes in the digital music market. The digital market, primarily driven by music streaming, increased by 22.7 percent while sales of physical products like CDs and Vinyl fell by 14.3 percent.

However, this is no reason to count the physical out. The physical market accounted for 53.4 percent of the revenue, while the digital products made up the other 46.6 percent.

Of this 53.4 percent, CDs had the strongest hold making up 45.4 percent of the market. Vinyl made up 5.1 percent of the market, which increased by 4.6 percent over the year. Primarily music streaming made the 46.6 percent of the market that was comprised of digital products. Music streaming made up 34.6 percent of the market this past year while downloads made up about 9.9 percent of the market.

While there was not as much growth as may have been desired, Dr. Florian Drücke, chairman of BVMI, saw the growth in the online music as an asset to the industry.  Drücke said,

“There continues to be a strong pull towards music streaming, which shows that the industry’s diversification strategy is spot on. However, the greater the share of the digital business gets, the more important it is to make sure that creative content can be refinanced in the digital sphere. This means that all forms of online music consumption must be linked to licenses negotiated on the market”,

and Bernd Dopp, Warner Music Central Europe Chief, called the digital music movement in Germany a “Music Revolution.”

Frank Briegmann, President, and CEO of the music production company Universal Music Central Europe and Deutsche, shared his plan for how to deal with this new digital age: “the digital transformation has become more dynamic and bearing in mind the increase in turnover from streaming, our strategy remains unchanged: to concentrate on the expansion of our digital distribution channels while at the same time developing new physical products, in order to reach every music fan with the perfect format.”

While revenue may not have grown in 2017, Germany can see a future in digital music and continues to have a thriving physical music market. It has grown in popularity slowly at first, but now makes up nearly half the market and music streaming is second only to CDs.

 

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